Fewer British companies going bust despite double-dip recession

The number of companies going bust fell last month despite Britain’s longest double-dip recession since the 1950s, according to a report.

Companies are managing to avoid insolvency despite low footfall in British shops and the double-dip recession (Picture: Getty)

Insolvencies dropped from 1,962 to 1,776 year-on-year – a fall of almost ten per cent.

The non-food retail sector saw the biggest improvement – with a decrease in failures from 0.2 per cent last year to 0.1 per cent in July.

Large companies with more than 500 staff and small enterprises with between 11 and 25 employees were more likely to stay in business.

However, the car market still faces a huge challenge with an insolvency rate of 41.7 per cent, according to the latest Business Insolvency Index from Experian.

Max Firth, managing director of the company’s business information services, said: ‘Since March this year, when the insolvency rate peaked at 0.11 per cent, it has remained fairly stable – between 0.08 and 0.09 per cent.

The lack of any real increase is clearly welcome and this picture is unlikely to change in the near future.’

Scotland’s insolvency rate is now the lowest in two years after a 25.3 per cent fall on the number of businesses failing since last July.

It is thought the general drop is partly down to the rise in the use of rescue deals known as company voluntary arrangements, where businesses avoid going into administration by asking lenders and creditors to renegotiate their debts.

A separate study by accountancy firm Wilkins Kennedy shows the number of CVAs rose by ten per cent to 769 in the year to June 30.

Budget hotel chain Travelodge last week launched a CVA in order to write off mounting debts of about £700million.